Increasing salience is being given to Britain’s productivity problem. Its relative standing in the international league tables has been in decline since the 1870s when it was in pole position. But the big change was in the 1970s when most Western European countries overtook us. The current concern is more about the way our productivity fell, as it tends to in recessions, in 2007 but has not yet rebounded back to pre-2008 levels. There was a slight recovery in 2010 and early 2011 but productivity has been declining again and has plateaued since 2013. This is historically unprecedented.

Many factors, including the Government’s austerity programme, lie behind this but what is also a concern is that there seems a genuine uncertainty, if not bewilderment, about what can be done about it. Insufficient attention is though paid to the human factor. Successive governments have targeted skills acquisition and the quality of the workforce may have increased.  and Conservative governments’ employment relations legislation has weakened trade union power beyond all recognition.  Yet, there remains a problem, which must lie elsewhere: presumably in work organization and management. A rich body of knowledge is being neglected that shows employee involvement is good for productivity and other related measures such as product and service quality. And much of this evidence-based is British and based on a national survey which is the envy of the world, the Government-led Employment Relations Survey series.

My recent work on the last two surveys, in 2004 and 2011, particularly shows that employee involvement has positive effects on productivity across the whole economy, private and public, manufacturing and services. An element of this is explained simply by employees being more satisfied. But job satisfaction does not simply arise from the air.  There are two types of employee involvement strategy: job or role involvement often known as empowerment or enriched job design, is an approach to the design of high-quality jobs that allows employees an element of discretion and flexibility over the execution and management of their primary tasks, while organizational-involvement management entails workers participating in decision-making, beyond the narrow confines of the job, in the wider organization or the business as a whole.  Role-involvement management concentrates on an employee’s core job, while organizational-involvement management entails workers participating in organizational decision-making. Organizational-involvement management aims to encourage greater proactivity, flexibility and collaboration amongst workers through the use of practices that offer opportunities for organizational involvement, either directly – through idea-capturing schemes, team work and flexible job descriptions – or indirectly, through the disclosure of financial information, specific training for involvement, or appraisal systems. Organizational involvement is thus concerned with the development of broader horizons amongst all workers, so that they can think of better ways of doing their jobs, connect what they do with what others do, and react effectively to novel problems.

Together role-involvement and organizational-involvement management constitute what is often known as High-involvement management. The prescriptive management literature recommends that involvement practices should be used together if their maximum effect is to be realised, as they are mutually reinforcing. However, in practice, the two types may not co-exist. Indeed the evidence we have from our WERS studies is that they are not even significantly correlated, and may have different, though overlapping, antecedents and effects. This is in fact what at this stage of its development what we might expect as much of the use of organizational involvement experimentation has been in mass production settings where role involvement is traditionally low and work is highly routinized, Japanese manufacturing being the obvious case in point.

The lack of correlation between the role and organizational-involvement management means that we can assess their effects independently.  And this is what I did in my analysis of WERS. I found that both types had significant effects on the productivity, quality and financial performance of organizations. But only role involvement management increased job satisfaction and in turn this partly explained the better performance. The explanation for the performance effect of organizational involvement did not lie in job satisfaction or enhanced employee well-being. Nor did it seemingly lie in workers simply showing more initiative. Given organizational involvement is concerned with the development of broader horizons amongst all workers, so that they can think of better ways of doing their jobs, connect what they do with what others do, and react effectively to novel problems we need to look beyond simple changes in employees’ individual satisfaction and behavior. Organizational performance is about achieving thing as a collective based on coordinated individual actions.

We can speculate that the most telling aspect of organizational-involvement management is perhaps then is it transforms the ability of us all to relate to each other as both colleagues and implicitly internal customers, through, for example, enhancing our appreciation of each other. This expansion of people’s horizons and shared understandings through greater contact and integration increases the individual and collective human and social capital of the organization. For the daily lives of employees it ought to reduce, what stress theorists call, hindrance stressors, such as employees having inadequate information and uncooperative colleagues, and increase, challenge stressors such as involving them in problem solving, enhancing team working and growing employees’ roles.

An interesting aspect of the WERS research is that we get the same results in 2004 and 2011. That is there is no change over the recessionary period. Moreover, we were able to measure the use of wage and employment freezes, redundancies work reorganizations and other measures to directly combat the recessions, and found the involvement–performance results were not fundamentally different in those workplaces that used a lot of these recessionary actions. This is especially interesting as a commonplace criticism of high-involvement management is that it is not sustainable. The argument is that managements will inevitably have to use cost-cutting measures when recessions and other crises occur and these will undermine the positive effects of involvement on employees and their trust in management and this in turn will dilute the performance effects of high-involvement management and precipitate a withering of genuine involvement.

Yet the evidence of WERS is that the use of role or organizational involvement practices remains stable in that time and confined to a minority (typically around a third for the most popular) of workplaces. The only practice to increase substantially was formal appraisal which is now almost ubiquitous. But whilst feedback is an important ingredient of involvement and information dissemination, all too often appraisal is not done well and does not produce the positive psychological effects it potentially could. Addressing such issues and more generally development of involvement may require a change in the approach of human resource managers and CEOs to their monitoring of practices. All too often the focus is on processes – for example, whether appraisals are being done on time, whether the information was disclosed to all people at the same time, or whether the training course went smoothly – rather than on the content in the delivery – what actually happened in the appraisal, dissemination or training activities?

Stephen Wood is a Professor of Management at University of Leicester. He can be contacted at [email protected]